Farhan Mir

2008 IMS
E-Commerce

BBA (Hons) 7
th
(Advertisement in E-Commerce)
Lecture Week 10,11,12
By: Farhan Mir
Farhan Mir
2008 IMS
Learning Objectives
Describe the objectives of Web advertisement, its
types and characteristics
Describe the major advertisement methods used
on the Web, ranging from banners to chat rooms
Describe various Web advertisement strategies
Describe various types of promotions on the Web
Discuss the benefits of push technology and
intelligent agents
Farhan Mir
2008 IMS
Understand the major economic issues related
to Web advertisement
Describe the issues involved in measuring the
success of Web advertisement as it relates to
different ad pricing methods
Compare paper and electronic catalogs and
describe customized catalogs
Describe Web advertisement implementation
issues ranging from ad agencies to the use of
intelligent agents
Learning Objectives (cont.)
Farhan Mir
2008 IMS
A Framework for EC
Farhan Mir
2008 IMS
Advertising
An attempt to disseminate information in order to
affect buyer-seller transactions
Companies must:
Deliver ads in an appropriate manner that will stick in
the minds of consumers
Ensure goods and services are those that meet the
needs of consumers
Ensure that advertising is not annoying and does not
have a negative impact
Farhan Mir
2008 IMS



The world wide web was invented
by a British scientist in a research
and development lab in 1993.

Internet Marketing began one year later,
with advertising in 1994 when
Hotwired.com
sold the first banner ad.






Farhan Mir
2008 IMS
Online Advertising
The Internet is the fastest growing
communication media
Each year, the percentage of the
advertising industry captured by the online
market is growing
Utilizes interactive marketing as it allows
advertisers to interact directly with
consumers

Farhan Mir
2008 IMS
Internet is the fastest growing medium in
history
Web Advertising (cont.)
Adoption Curves for Various Media - The Web Is Ramping Fast
Farhan Mir
2008 IMS
Internet advertising is
the fastest growing
marketing channel.
2001:
5.25%
2004:
8.35%
2007:
17.00%
Percenta
ge of
Media
Budget
Allocated
to Online
Ads:
Farhan Mir
2008 IMS
Online Advertising and Revenue
Generation
Advertising revenue remains a significant source
of income for many Internet-based organizations
Advertising revenue on the Internet was $8.2
billion in the United States
Many dot-com failures were a result of relying on
online advertising revenue as the only revenue
source
Yahoo.com currently relies on its advertising
revenue as its major revenue source
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Opening Case :
CD-Max Uses E-mail Lists to Advertise
CD- Max Enterprises
A two-person business specializing in CD-ROM
development
Operates a resource site for information delivery
Generated an e-mail list of site visitors
the list is also valuable to other advertisers
50 lists were created to fit different advertisers
outsourced the job of creating and maintaining the lists,
and selling them to potential advertisers, to NetCreation
which developed 275 lists from the names collected at
CD-Max
the list sales surpassed the companys expectations
selling e-mail lists has become a lucrative business
since then
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Web Advertising
Advertising is an attempt to disseminate
information in order to affect a buyer-seller
transaction
Why Internet Advertisement?
Three-quarters of PC users gave up some television
time
Internet users are well educated with high-income,
which makes them a desired target for advertisers
Ads can be updated any time with a minimal cost;
therefore they are timely and very accurate
Farhan Mir
2008 IMS
Ads can reach very large numbers of potential buyers all
over the world
Online ads are much cheaper in comparison
to television, newspaper, or radio ads. Such
ads are expensive since they are determined
by space occupied, how many days (times)
they are shown, and on how many national
and local television stations and newspapers
they are posted.
Web ads can be media rich, including voice and video
Web ads can be interactive and targeted
The use of the Internet is growing very rapidly
Web Advertising (cont.)
Why Internet Advertisement?
Farhan Mir
2008 IMS
Interactive Marketing
Web Advertising (cont.)
Consumer can click with his/her mouse on an ad for more
information or send an e-mail to ask a question
Volume sales Customer data Customer relationships
Passive Passive Active
Food,
personal-
care
products,
autos
Credit
cards,
travel,
autos
Upscale
apparel,
travel,
financial
services, autos
High volume Targeted goods Targeted individuals
Televisio
n,
magazin
es
Mailing
lists
Online
services
Storyboards Databases
Servers,
onscreen
navigators, the
Web
Mass Marketing Direct Marketing Interactive Marketing
Best outcome
Consumer behavior
Leading products
Market
Preferre
d media
vehicle
Preferred
technolog
y
Worst outcome Channel
surfing
Recycling
bins
Logoff
Farhan Mir
2008 IMS
Advertising Methods
Banners
Banners are everywhere
Keyword banners
Random banners
Benefits
be customized to the target audience
be customized to one-to-one targeted advertisement
Banner Swapping
Direct link between ones site to the other site
Ad space (a source of revenue for many companies)
Farhan Mir
2008 IMS
Banner Advertising
Most common form of online advertising
So prevalent many users have developed
banner blindness
Banners can be distributed in a variety of ways
Banner success is most often measured by click
through rate
Banners build brand awareness and increase
purchase probability
Farhan Mir
2008 IMS
Splash Screen
Capture the users attention
Promotion purpose
Major advantage : create innovative
multimedia
Advertising Methods (cont.)
Farhan Mir
2008 IMS
E-mail
Several million users can be reached directly
Purchase e-mail addresses
Send the company information; low cost
A wide variety of audiences; customer
database
Problem: Junk mail or spamming
Target a group of people that you know
something about
Advertising Methods (cont.)
Farhan Mir
2008 IMS
Chat Rooms
Virtual meeting ground
Can be added to a business site for free
Allows advertisers to cycle through messages
and target the chatter again and again
More effective than banners
Used in one-to-one connection
Advertising Methods (cont.)
Farhan Mir
2008 IMS
Pop Ups
Pop ups are becoming increasing popular
(and frustrating! In other
situations.solution in the last lines)
Very intrusive form of adverting
Variety of methods used to attract and keep
users attention
Internet users and ISPs can provide
software packages to block pop ups (Pop-
Up Stopper)
Farhan Mir
2008 IMS
URL (Universal Resource Locators)
Advantages:
minimal cost is associated with it
submit your URL to a search engine and be
listed
keyword search is used
Disadvantages:
search engines index their listings differently
But still very useful method to advertise
Advertising Methods (cont.)
Farhan Mir
2008 IMS
Keyword Search
Currently the fastest growing venue for
internet marketing
Control $1.3 billion marketing dollars
~Jupiter Research
Search engines are now full-fledged media
companies
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Advertisement Strategies
Internet-base Ad Design
Advertisements should be visually appealing
Advertisements must be targeted to specific groups or to
individual consumers
Advertisements must emphasize brands and a firms
image
Advertisements must be part of an overall marketing
strategy
Advertisements should be seamlessly linked with the
ordering process
Designing Internet ads involve the following factors:
Farhan Mir
2008 IMS
Internet-based Ad Design: Important Factors
Advertisement Strategies
(cont.)
Page-Loading Speed
Graphics and tables should be simple and meaningful.
They need to match standard monitors.
Thumbnail (icons graphs) are useful.
Business Content
Clear and concise text is needed. A compelling page
title and header text is useful.
The amount of requested information for registration
should be minimal.
Farhan Mir
2008 IMS
Navigation Efficiency
Well-labeled, accurate, meaningful links are a
must.
Site must be compatible with browsers,
software, etc.
Advertisement Strategies
(cont.)
Internet-base Ad Design: Important Factors
Farhan Mir
2008 IMS
CyberGold (www.cybergold.com), Goldmine
(www.goldmine.com) and others connect you
with advertisers who pay you real money to read
ads and explore the Web.
Netstakes runs sweepstakes that requires no skills;
in contrast with contests. You register only once
and can randomly win prizes (see
http://webstakes.com). Prizes are given away in
different categories. The site is divided into
channels, each has several sponsors. They pay
Netstakes to send them traffic. Netstakes runs
online ads both on the Web and in several
hundred thousand e-mail lists that people
requested to be on.
Free PCs will be given soon in exchange for
obligation to read ads.
Online Events, Promotions and Attractions
(cont.)
Farhan Mir
2008 IMS
Benefit : instead of spending hours searching
the Web, people can have the information they
are interested in delivered automatically to their
desktop via Web technology and the Internet
Pre-specification profile, selection of appropriate
content, and download selection
Push Technology
Farhan Mir
2008 IMS
Also known as Pointcasting
Analogous to mass customization
Transmits the most relevant information directly to the
user
Push on the Intranet
Companies use push technology to set up their own
channels to pointcast important internal information to
either their own employees (on intranets) and/or their
supply chain partners (on extranets)
The Future of Push Technology
Drawback : the bandwidth requirements are large
Experts prediction : the technology will never fly
Push Technology (cont.)
Farhan Mir
2008 IMS
Online Catalogs
To merchants, the objective of catalogs is
advertisement and promotion
The purpose of catalogs to customers is
providing a source of information and price
comparisons
Consist of product database, directory and
search capability and presentation function
Replication of text in paper catalogs
More dynamic, customized and integrated
Farhan Mir
2008 IMS
1) Dynamics of information presentation
Static Catalogs: The catalog is presented in textual
description and static pictures.
Dynamic Catalogs: The catalog is presented in motion
pictures and graphics and possibly sound.
2) Customization
Ready-made Catalogs: Merchants offer the same
catalog to any customer.
Customized Catalogs: Deliver customized contents
and display depending upon the characteristics of
customers.
Online Catalogs (cont.)
Farhan Mir
2008 IMS
Customized Catalog
Identify the interesting parts out of the whole catalog
Tool for aiding customers to concentrate on their needs
LiveCommerce
creating catalogs with branded, value-added capabilities
locate the information
compose their order
individualized prices, products, and display formats
Let the system automatically identify the characteristics of
customers based on the transaction records
Customized, Interactive and Dynamic Catalogs (Remember
the Ford Company Website!)
Farhan Mir
2008 IMS
Farhan Mir
2008 IMS
Is There a Negative Side to Online
Advertising?
Pressure to create new online advertising
formats came following the dot-com crash
Result was an explosion of creative ways to
engage users in the ads using sound,
animation, etc.
User experience began to decline

Farhan Mir
2008 IMS
Managerial Issues
Make Vs. Buy (Ad agencies)
Finding the Most Visited Sites
Company Research
Ethical Issues